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Barclays Small Business Manager talks Fintech, Innovation, and Entrepreneurship

by Startacus Admin

Few aspects of running a business have changed as significantly in recent years as banking and finance. The ever-growing influence of ‘digital’ has paved the way for fintech innovations to thrive, revolutionising the way that businesses complete transactions and raise capital, as well as business customers expectations of their financial service providers.

Amongst this much-altered landscape, the traditional high-street bank remains a keystone of the industry, with new technologies bringing challenges and opportunities in equal measure.

We were also delighted that Barclays chose to support our recent upSTART Belfast pitch battleat this year’s Digital DNA event, a day-long competition which day innovative tech startups from across the UK and Ireland, battle it out to win a £50K prize package!

Over to Janine...

Hi Janine. First off, in light of the rapid rise of non-traditional banking and alternative finance opportunities open to startups and small businesses, how important do you think that the high-street bank remains?

On the point of non-traditional banking, the media is flooded with talk of digital disruption and its impact on long-standing institutions. Whilst I am convinced that digital services are integral to the client experience, and necessary to maintain our place as a leading financial services provider, I am also convinced that to remain relevant, we must leverage the trust and security that people associate with us and combine that with a strong client experience.

A balance has to be found between human and digital. Digital disruption means more than automation; the whole journey needs to be re-engineered. The challenge for banks will be that they do not simply become a commodity provider – this is where a strong partnership with clients will be the differentiator and we strive to deliver that at Barclays.

On the point around alternative finance opportunities, it is right to say that borrowing options have widened. A diverse funding ‘ecosystem’ is good for the local economy and businesses should have access to what’s right for them and where they are at in their lifecycle. That ecosystem includes options such as crowdfunding, business angels, start-up loans, investment firms such as Business Growth Fund and venture capital.

Banks like Barclays are learning from and working with these new lenders, introducing them to clients where they offer the right funding option – they’re not always competition – it’s about complementing each other. A bank’s strength comes from being able to work with their customer to design the funding strategy that fits them, presenting a range of options and how the bank can help support.

How have the ‘big banks’ sought to innovate given the vast changes which have been seen in the sector, and how important do you think it is for business customers that they continue to do so?

Barclays has a proven track record in innovation in how it does business, for example, launching the Pingit for Corporates mobile payment service and video banking.

In a speech recently Vince Cable said the average SME thought about getting finance two days before they needed it. So, how do you give a business the help they need almost instantly? One solution already being offered by Barclays to 300,000 SMEs is a pre-assessed credit limit.

The company and the bank’s business manager can see online how much is available to borrow and, for amounts up to £25,000, it takes just five clicks to get that money into the company’s account within 24 hours. As well as beating the crowdfunders when it comes to ease and speed, it demonstrates a more fluid approach to lending that will smooth the way to growth for larger corporates as well as the SMEs.

Big banks like Barclays are investing huge amounts of money in streamlining how we do things, and I’m sure we’ll see more new products and services in the next few years.

In recent years especially, we have witnessed banks increasingly giving small businesses and startups more attention, particularly when it comes to supporting new enterprise and innovation. Some would suggest that the traditional banking sector was behind the curve in this regard- would you agree?

This may be a fair criticism of the traditional banking sector. There has been a shift in employment trends in recent years in that we are seeing a gradual return to entrepreneurship and increasing employment within small businesses.

The nationwide Octopus High Growth Small Business Report revealed that whilst High Growth Small Businesses (HGSBs) make up less than 1% of UK companies, they created 1 in 3 new jobs in the UK in 2014 and 3 times the number of new jobs created by the FTSE 100 companies.

The more local NISP Connect Knowledge Economy Report identified that salaries within the Knowledge Economy sector in Northern Ireland are around 50% higher than the average and the region boasts the second fasted growing Knowledge Economy Index across the UK.

Whilst banks and funders may have been slow to respond to this shift, there is a recognition of the importance of this sector for future economic growth and the banks want to be a part of that. They may have been slow to come to the table, but it is good to see them firmly at the table now!

Can you tell us a little about some of the ways that Barclays is helping to support new business growth and facilitate innovation in the UK?

Barclays is building a dedicated support programme for high growth firms to include a regional network of corporate bankers who are exclusively focussed on supporting high growth companies and their founders. Access to the right types of finance is vital and when growth is rapid, alternative forms of funding may be more suitable.

We introduced two new dedicated funds in 2015 to specifically help innovative companies: Barclays High Growth Venture Debt Fund and Innovation Finance. We recognise the need for fast growing companies to have space to develop their ideas and grow – considering local access to sites, technology and mentors could also help a business to flourish.

Co-working spaces look set to increase in 2016 across the UK, and we are exploring how we can utilise space across our premises for early stage scale-up companies to co-locate, collaborate with peers and get expert advice. Barclays is committed to helping drive UK prosperity and we look forward to working with ambitious high growth firms and their founders, giving them support across every step of their journey.

Compared with the rest of the UK and Ireland are there any challenges that NI businesses are particularly facing?

Sometimes I think we are notorious for trying to make a ‘special case’ for Northern Ireland, whether that be in business, politics or some other sphere. But there are definitely some major structural challenges in our local economy (e.g. over-reliance on public sector and high levels of inactivity) and specific cost challenges that our local businesses face (e.g. transport and energy costs).

However, we must also recognise and leverage off some of the opportunities we have, including a highly skilled and competitively priced labour market. We also have the opportunity of as lower corporation tax rate from 2018, and we have all seen the transformational impact that had on the ROI economy.

What are some of the key growth sectors in Northern Ireland in relation to new businesses?

There are some traditional sectors, such as Manufacturing, Agri-food, and Aerospace & Defence that Northern Ireland has always been a strong player in and we are seeing encouraging levels of innovation within local businesses operating in these sectors to help offset the headwinds that they are facing.

We are also seeing Northern Ireland starting to establish itself as a real centre of excellence for some other sectors such as Financial Services (and more particularly Financial Technology and Cyber Security), ICT and Electronics and Life & Health Sciences.

Much of this is being driven by the high levels of research and innovation coming out of our local universities and being supported by the likes of the Northern Ireland Science Park and the Centre for Secure Information Technologies (CSIT), which is great to see and should be encouraged.

Why has Barclays been keen to get on board with the upSTART Pitch battle and what in particular will you be looking out for from the pitching contestants?

This will be the first year that the Digital DNA event will deliver the upSTART Pitch battle, an exciting startup element to the conference which will help identify, showcase and reward digital startups that have the potential to become high-impact businesses.

We have admired the growth and success of the Digital DNA event over the last four years and when we spoke to the organising team, we were excited about the format of the upSTART Pitch battle and particularly the boxing theme that would help bring out the passion, skill and competitiveness that we regularly see when working with entrepreneurs.

It very much ties in with our High Growth and Entrepreneurs initiative, which we launched last year. Through this, Barclays believes in supporting the substantial investment – both emotional and financial – that is required to establish and run fast-moving, high growth companies.

The impact of high-growth businesses is hugely positive – creating new jobs, new opportunities for investors and galvanising economic growth as a whole. That’s not to mention the difference these companies make to our day-to-day lives through innovations in technology, medicine, communications and so much more.

Barclays has always backed the visionaries and innovators throughout our 325-year history. Through our High Growth and Entrepreneurs initiative and our involvement with upSTART, we’re excited to play our part in supporting Northern Ireland’s entrepreneurial talent and look forward to the positive impact on jobs, taxes and wealth that will bring to our region.

Thanks for the insights Janine and of course for Barclays support of the upSTART Pitch Battle at Digital DNA!

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